The Bad, Bad “Bad Boss Tax” Idea

Jonathan Blake tweeted about the latest bad idea to come from Minnesota’s political charity machine:  "The Bad Boss Tax".

In this instance a “bad” boss is one that hires lots of low-wage workers: workers who also receive government benefits like food stamps or subsidies for healthcare, housing, or energy costs.  Hiring workers who also receive government benefits in some form is said to be taking advantage of the taxpayer.

Wal-Mart appears to be the specific target of this campaign.  But what about the chicken/egg argument?  By hiring those on public benefit, isn't Wal-Mart supplementing their household income and subsidizing the taxpayer?

According to the supporters of the Bad Boss Tax, the employer is supposed to pay such a high wage that the employee would not qualify for any government benefit.  If not, the employer will have to pay hefty fines for hiring the dependent.

That’s a tall order, given that most Americans now receive some form of government benefit.

TakeAction Minnesota is pushing the idea, which, apparently will be introduced as a bill in the state legislature next year.  As Blake pointed out, TakeAction doesn’t seem to have thought this idea through.

Beyond the obvious—employers will avoid hiring those on public benefit—the hardest hit employers by such a law are those businesses and charities that specialize in hiring the disabled, the homeless, and those giving the poor and unskilled a leg up.  Do we really want to discourage hiring those at the bottom of the ladder with fines and penalties?

Where Everyone Is Above Average, Part 1

[Editor's Note 1: this piece has been updated from its original version to include a response from MPR.  See below.  It has also been updated from the original version to improve readability.]

[Editor's Note 2:  FOX 9 News covered this story on their magazine show The Reporters.  Watch this piece beginning at the 9:33 mark.]

A $1 million-a-year pension?  Not even many one percenters can dream about retiring on an income of $1 million per year.

Rarer still is the former non-profit executive who can pull down a million a year in his golden years.

The former head of Minnesota Public Radio (MPR), Bill Kling, it appears, was doing just that.  Bill Kling practically invented public radio, founding MPR back in the 1960’s, and either founded or was there at the start for all of public broadcasting’s key institutions.

Kling, now 72, retired from MPR at the end of June 2011.  However, his income from that taxpayer-funded organization actually went up for two years after leaving the helm.

According to tax documents filed by MPR and its parent non-profit company American Public Media Group (AMPG), Kling received compensation of $1,086,351 in the twelve months ending June 30, 2013 (the most recent data available).

In the 2013 fiscal year, Kling received direct compensation[1] of $370,049.  Kling’s consulting company GreenIsland Group, received[2] an additional $716,302 from MPR.  As described in the footnotes to MPR’s IRS Form 990 tax return,

Beginning on July 1, 2011, Mr. Kling began to perform services for AMPG, MPR’s not-for-profit parent support organization, in accordance with the terms of the employment agreement that called for a post-employment consulting period, which ends December 31, 2013.

Here is a summary of Kling’s MPR compensation the last three years.

Year Ending	Direct	Other	GreenIsland
30-Jun	Comp	Comp	Consulting	Total
2013	370,049		716,302	1,086,351
2012	521,041	20,142	238,842	780,025
2011	644,872	38,913		683,785
Total				$ 2,550,161

As you can see above, Fiscal Year 2011 was Kling’s last year on the MPR payroll.  His first two years in retirement have seen his compensation rise considerably above his previous level.

In addition, Kling received another interesting perk.  Buried in AMPG’s tax documents is this nugget,[3]

Travel for companions upon the retirement of William Kling, the founder of AMPG and MPR, and their president until June 30, 2011, the organization reimbursed Mr. Kling for airfare for him and his spouse for travel related to a retirement vacation.  (See update below.)

I’m not the first to raise questions about the size of Kling's compensation, or notice the link between his compensation and taxpayer subsidies for MPR’s programming, or document the Byzantine interplay between MPR/Kling’s various not-for-profit and for-profit ventures.

On the outrage scale, Kling’s GreenIsland gig can’t hold a candle to the $2.6 million Kling pocketed from the 1998 sale of the for-profit MPR subsidiary River Town Trading catalog company. 

Still, one wonders about the scale of Kling’s post-retirement benefits given the scale of the taxpayer contributions to his former organization.

For its part, MPR's 2013 annual report suggests that support from government agencies represents only 8 percent of the entity’s $85 million in annual revenue.

That cuts both ways: MPR could restructure its business model to find a way to live on the other 92 percent of its revenue sources, then they could pay their executives (past and present) whatever they wished, consistent with the non-profit nature of their operation.

Otherwise, MPR has some obligation—in accepting taxpayer money—to be careful with the taxpayer dollar.  And it turns out to be a lot of dollars from state taxpayers.

MPR accepts more than $1 million a year from Minnesota’s Legacy Fund, the dedicated state sales tax passed by referendum in 2008.  Since the creation of the Legacy Fund, MPR has received the following amounts from Minnesota taxpayers,

Fiscal	Legacy
Year	Funds
2015	1,485,000
2014	1,485,000
2013	1,134,535
2012	1,318,000
2011	1,325,000
2010	1,325,000
Total	$8,072,535

Of course, none of those dollars were earmarked for Kling’s golden retirement.  But the generous taxpayer funding of the organization, overall, should raise questions on the appropriate level of executive compensation.  After all, Minnesota’s Governor earns only $120,303.

Doing Well by Doing Good

Consider the example of Apple co-founder Steve Jobs.  Over his career, Jobs is said to have accumulated a fortune of more than $8 billion.  But every transaction between Apple and the consumer was strictly voluntary.  When I was last in the market for a mobile phone, I bought Jobs’ iPhone, but I could have purchased a Samsung or a Nokia or (more importantly) none at all.

When it comes to my support of MPR, as a taxpayer, I have two choices:  pay up or go to jail.  There seems to me something qualitatively different about a private fortune based on voluntary transactions and a private fortune seeded with taxpayer dollars extracted under the implied threat of force.

In the history of our republic there have been many great public institutions founded by soldiers, doctors, scientists, educators, and others.  But I can think of few other examples where a great public institution was built alongside a large personal fortune.

As they say in the news business, a phone call to MPR for comment was not immediately returned.

Updated:  MPR called back and clarified a number of points.  First, Mr. Kling's post-employment contract ended as scheduled on December 31, 2013.  He is no longer being paid by the organization.  He was paid additional money not reflected in the table above.

Those amounts will be disclosed by MPR in their next annual tax return.  Finally, MPR was reimbursed for the vacation travel costs noted above by individual members of the Board of Trustees as a gift to Mr. Kling.

In Part 2, I examine the pay of other MPR executives.  In Part 3, I compare MPR executive pay to that offered by other organizations.

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[1] See MPR’s 2013 IRS Form 990 Income Tax Return, Schedule J, Part II, Line 8.

[2] See MPR’s 2013 IRS Form 990, Schedule L, Part IV, Line 3.

[3] See APMG’s 2013 IRS Form 990 Income Tax Return, Schedule J, Part III, Page 3.

The Great Swimming Pool Debate of 2014

As conservatives and Republicans we often talk about the need to make the case for limited government.  It turns out, making the case for limited government can be tougher than you would think.

Case in point, my participation in last month's Sartell Says debate on municipal swimming pools.  Sartell is a suburb of St. Cloud, Minnesota, and the "Sartell Says" series is an Oxford Union-style chamber debate, where the audience votes before and after the event.

Last month I was on the "con" side of this question,

     Outdoor public pools are a valuable and necessary function of a city?

You can hear the results yourself, as Minnesota Public Radio has archived a podcast of the event, which the station broadcast last Friday as part of the MPR News Presents program.  [Yes, despite their best efforts, every once in a while, my voice sneaks onto their station.]

The "pro" side argued that taxpayer-funded outdoor swimming pools would cure every societal ailment from childhood obesity to income inequality.  When offered "free swimming pool," the Sartell audience was in no mood to hear about escalating operating costs and slippery slopes.

DEED’s Job Numbers Don’t Add Up

Each month the Minnesota Department of Employment and Economic Development (DEED) issues a press release announcing the number of jobs created in the previous month by the state’s economy.

And each month local media hail the latest figure as further proof (as if it were needed) of the genius of the current Democrat-run state government.

For June, DEED reported that the state gained 8,500 jobs for the month (3,900 created by the government, by the way).  DEED also reported that the state gained 10,700 jobs in the first six months of 2014.

Doing the arithmetic, that total means Minnesota gained 8,500 jobs in June, but a mere 2,200 jobs in the five months of January through May, combined.

Each month DEED also reports on the jobs created in the previous 12 months, for a rolling look at the number of jobs created for a year-long period.  For the 12 months ending June 2014, DEED reports Minnesota created almost 53,800 jobs.  That figure would mean that we’d created 43,100 jobs in the six month of July through December 2013, but a mere 10,700 jobs in the most recent six months.  Rather than suggesting an economic boom, those numbers indicate a real weakness in our state’s economy.

But consider this anomaly:

Reporting		Jobs Gained
Month	Month	YTD	Last 12 Mo.
June	8,500	10,700	53,779
May	10,300	---	45,617
April	(4,200)	---	41,934
March	2,600	---	41,582
February	(100)	---	44,714
January	600	---	52,160
Total	17,700

Adding together the number of jobs created each month in 2014, as reported by DEED, produces a total of 17,700 jobs for the year so far.  So that means that sometime during the last few months, 7,000 jobs have vanished from the official state rolls.

Here’s a prediction:  that 8,500 number for June will be quietly revised downward.  That’s been the pattern of late:  May’s job gain number was revised down from 10,300 to 7,200.  April’s loss of 4,200 jobs was revised down to an even bigger loss of 5,300.  The originally reported March gain of 2,600 jobs was revised down to 1,900 the following month.  DEED marked down the February loss of 100 jobs it originally reported by a further 1,100.

DEED actually revised the January gain of 600 upward by 200 the following month.  For those keeping score at home, we’ve had four consecutive months of downward revisions, with the average monthly downgrade being 1,500 jobs.  That’s where 6,000 of the 7,000 missing jobs have vanished, but 1,000 are still not accounted for.

If we were flipping coins, the odds of four consecutive downward revisions would be 1 chance in 16, or 6.25 percent.  If it were a race horse, I wouldn’t bet it to show.

At the length truth will out.

For the Common Good

In this All-Star month for Minnesota, St. Paul also will be hosting a big-time celebrity, as presumed-Presidential candidate Hillary Rodham Clinton visits Garrison Keillor’s Common Good Books to sign copies of her light-selling tome Hard Choices.

Keillor hopes to sell 1,000 copies of the Clinton book in conjunction with her July 20^th appearance at his St. Paul bookstore.

It may surprise fans of Keillor to learn that the public radio star’s book store is owned by Prairie Books LLC, his for-profit company.  Yes, the man whose A Prairie Home Companion radio program is heavily dependent on state and federal tax dollars for distribution on public radio networks soils himself with the grubby pursuit of coin. 

Prairie Books is just part of the for-profit Keillor empire, which includes Prairie Film Productions LLC, Prairie Films LP, and Prairie Home Production LLC.  Despite his commitment to the common good, Keillor is big into intellectual property rights.  For his radio show alone, Keillor claims ownership of some 32 words, phrases, and titles.

Keillor has parlayed taxpayer-supported public radio into a private fortune, as his various for-profit enterprises have made him a wealthy man.  And he has used his wealth to support Democrat Party candidates and causes.  For example, Keillor donated $1,000 in cash and $3,000 in catering to Democrat Mark Dayton’s re-election campaign earlier this year.

As an individual, Keillor can and does donate to Democrat candidates.  However, for-profit corporations cannot donate directly to political candidates.  In hosting Hillary Clinton at his bookstore, Keillor has found a neat end-around this restriction.  Surely, his bookstore is not the first for-profit one to help sell books written by an active politician.  But the nature of the July 20th transaction cannot be ignored.

His Common Good bookstore will make money—not for the common good—but for its owner and candidate Clinton.

A Pretty Good Deal!

Accountability Journalism

Leave it to the overseas press to do the work that local Minneapolis media can’t be bothered with.  President Obama flew to Minnesota this week to visit with a typical, struggling mom, “a 36-year-old working wife and mother of two preschool-age boys,” as reported by the Minneapolis Star Tribune.

Only the U.K.-based Reuters news service did any actual reporting on the meeting, noticing that Obama’s luncheon partner’s

LinkedIn profile shows she was once a field organizer for Democratic Senator Patty Murray of Washington.

I noticed the same thing last night, but our local media was too thrilled to have the Great Man in their midst to do any due diligence on the White House’s carefully choreographed Minnesota campaign stop.  Wouldn’t want to spoil the mood.

Too bad, they missed what could have been a great story.  The Star Tribune did report,

President Obama began a two-day visit to Minneapolis on Thursday sharing cheeseburgers with a local working mother and bringing a middle-class message tailor-made to aid Democrats fearful of massive losses in the upcoming election.

Which Democrats?  Did the President choose Minnesota—of all states—for his visit because some of those fearful Democrats may be located in the North Star state?  Star struck local media were unable to form a question on that subject.

Even if our worried, local everymom did turn out to be a ringer, her concerns are real.  She “wrote of a weakened housing market hitting her family hard, causing her husband’s construction business to fold.”  Sorry, with this President, that’s a feature, not a bug.

As the Star Tribune’s editorial page gleefully declared this morning, “There will be no need for any additional single-family, large-lot houses.  Zero.”  This is this direct result of the President’s New Urbanist, no-growth policies.  Sorry husband of local working mother, you are just out of luck.

But don’t worry, the photo op turned out great.

Unemployment Rates in Michigan, Minnesota, and Wisconsin

Compiled in one graph, from January 2011 to the present.

The TakeAction/ABM Merger

The political charity TakeAction Minnesota bills itself as an organization created to "work for social, racial, and economic justice."  As we always expected, it turns out to be just another Democrat party front group.

According to the latest filings at the Campaign Finance Board, on May 21st TakeAction's Political Fund transferred $50,000 from TakeAction's 501(c)(4) tax-exempt non-profit to the 2014 Fund, the fundraising arm for the Democrat political machine's Alliance for a Better Minnesota.

Make no mistake, TakeAction exists to elect Democrats.

The Indonesian Connection, Part 3

A new batch of Minnesota state campaign finance disclosures is out, and our favorite Indonesian businessman pops up, yet again.  The latest disclosures cover the period from April 1st through May 31st of this year.

On April 3rd, Johannes Marliem donated $25,000 to the Minnesota state Democrat party, that donation coming only a week after he had donated $20,000 to the state's Democrats.

At $45,000 in 2014 donations, Marliem is the largest state Democrat party donor not directly related to the Dayton family.  Democrat Governor Mark Dayton's father Bruce donated $100,000 and Gov. Dayton's former wife (Alida Rockefeller Messinger) has donated $150,000 so far this year.

P.J. O'Rourke on Detroit Free City

Humorist P.J. O'Rourke has taken up the cause of Detroit Free City in the pages of the Wall Street Journal.